Sunday, 15 December 2013

Marstons land deal - Cllr Caiach's response

Cllr Siân Caiach has responded to the attack on her by council leader Kevin Madge with a statement of her own about the Marstons land deal.

Her statement casts some interesting new light on aspects of this latest scandal, and sadly it is unlikely that any of the titles owned by Local World will give it the time of day. So to try to redress the balance just a little, here is her statement in full.

"I would like to first make it clear that I am asking Kevin
Madge to resign as Leader of Carmarthenshire County Council because of his
responsibility in the decision to sell an overflow car park leasedto the Scarlets rent free, providing considerable funds for the club.
The Leader is expected, like all councillors, to always display openness and
accountability. Although informed of the deal, he kept the details secret. The
sale of public assets to benefit a private company should surely be discussed
openly.

"I understand the council,
under EU regulations,is only allowed to
give private companies active in the EU the equivalent of 200,000 Euros or
£169,000 over every 3 years, and one off grants of 50% costs to build, for example
a stadium like Parc Y Scarlets.

"We appear to have
financed the Scarlets beyond the limits of this law. In this desperate economic
situation we are reducing services and asking hundreds our own council staff to
leave their jobs and, I believe, giving away too much money to the rugby club.

"It is a matter of record that in July 2012 the council
executive board, headed by Mr Madge, instructedan officer, Jonathan Fearn to take sole charge
of the saleand consult Cllr Jeff
Edmunds, executive board member for finance.Prior to that time it was planned thatthe car park would be an out of town shopping
area, not a pub, but that deal fell through and the land lease was later sold
on to Marstons.

"The area was sold for £850,000 according to the land
registry. The Council’s accounts showed they got £200,000 and the fate of the
rest of the money was not disclosed to ordinary councillors like myself, and then
refused under the Freedom Of Information Act.

"Jonathan Fearn told me by email that following “normal negotiation and the
agreement of allowable costs, the remaining proceeds were shared equally
between the club and the council”.

"Now Cllr Madge tells us that an independent District Valuer
assessed the value of the land and advised as to how the remaining proceeds of the sale
could be divided. The proceeds seemed to
be, on that basis, around £400,000, so the costs of the sale were over half the
sale price.

"Cllr Edmunds asked to see me when I had asked him for
information, and told me that he wished to be open and transparent and give me
the full facts about the sale. Indeed the costs of the sale were very high. The
original deal involving a retail use, he told me, had been suggested by HDD, the
owners of the Llanelli Eastgate Centre who asked the Scarlets to take up some
units there to set up their shop and café bar. They loaned them , I was told, £280,000
to fit up the shop units and start this new business venture.As the Scarlets needed to pay this back, Cllr
Edmunds and Mr Fearn were persuaded to call this £280,000 an “allowable expense”
of the car park sale.

"Other payments deducted
from the £850,000 were around £50,000 for architects and agents fees, £70,000
for compensation to the clubfor the car
park lease, a £30,000 finder’sfee to the
Scarletsfor finding a buyer and in the
end, I was told, more than half the “official “proceeds of £420,000. The
Scarlets got £220,000, the council £200,000.

"Now I have no objection to the sale of unused council
land to provide money for the people of Carmarthenshire’s
council services.However, as the
Scarlets had not ever paid a penny of rent for this lease the split seems very
generous. They have had around £600,000 pounds.

"They may be entitled to compensation for the lease and
a finder’s fee and a profit share, but do they really qualify for over half the
profit plus the cost of setting up their private shop and café bar?

"The law says that 200,000 Euros(equivalent to about £169,000) is the maximum
allowed for councils to give bodies like the Scarlets every 3 years. So as I
understand it, any informal grants, as the “allowable expense” may well be, or
other financial help has to be less than this amount in a three year period.

"Councillor Edmunds told me that he had informed the
Leader of the result of the decision delegated by the executive, but was not
aware that the information had been passed on. This means that the other executive
board Councillors, who recently granted the club more financial support by
reducing the interest on the Scarlet’s loan from the council, may not have
known that a grant already given from the sale may have exceeded the whole 3
year quota.

"I find it disturbing that the legal explanation of how
we can give all this money to the Scarlets is kept secret.

I suspect all may not be in order.

"I thank Councillor Jeff Edmunds profoundly for being
open and honest about where this particular sale money went and why. I think he
has acted bravely and with integrity.He
was under considerable pressure not to talk about this sale.

"It is Councillor Madge as Council Leader who has
ultimate responsibility for the County Council. If he or the Executive Board he
leads instructs an officer to take over the Councillors’ responsibility for a
major financial matter, he is still responsible for that decision.Cllr Madge has not denied that he did not
inform other councillors about the money from the sale, and he has not made it
clear why State Aid Law does not apply to the Scarlets.

Cllr Madge says he is “extremely proud” to be associated
with what has happened, and there is no need to consider resigning. I
disagree."

2 comments:

Anonymous
said...

The Scarlets are important to the cultural life of many in the county and they also play a part in the economy of Lanelli. The Council is right to promote them. But such promotion needs to be absolutely transparent and fair. They are, after all, a business, with many very well paid executives and players.

So, when public money is seemingly showered on them, at a time when vicious cuts are being made or planned to services and facilities throughout the county, Kevin Madge needs to justify why the Scarlets deserve such generosity with scarce public funds, rather than try to hide information behind a wall of secrecy.

I don't have any expertise in valuation, but it seems incredible to me that the cost of a completely unrelated development in the Eastgate Centre can be recouped as an allowable cost. And why do the public have to pay for architects? If Marstons want a pub they should pay for it themselves.

The EU state aid question is no doubt riddled with legal complexity, but the bottom line is that the public is entitled to a very clear explanation as to why so much public money has ended up in the Scarlet's coffers.